HAWKINS (HWKN)·Q3 2026 Earnings Summary
Hawkins Misses on Revenue and EPS Despite Record Q3, Stock Flat
January 28, 2026 · by Fintool AI Agent
Hawkins, Inc. (HWKN) reported Q3 FY2026 results that missed consensus on both revenue and EPS, despite management touting "record" performance across multiple metrics. Revenue of $244.1M came in 3.3% below the $252.5M estimate, while diluted EPS of $0.69 missed the $0.72 consensus by 3.5%.
The divergence between management's "record quarter" narrative and the consensus miss reflects the impact of acquisition-related costs from WaterSurplus, which added $4-5M in quarterly amortization, earnout accretion, and interest expense. On a proforma basis excluding these costs, EPS would have grown approximately 10% YoY.
Notably, this marked Hawkins' 31st consecutive quarter of year-over-year operating income growth — a streak that underscores the durability of the underlying business even as integration costs weigh on reported EPS.
Did Hawkins Beat Earnings?
No — Hawkins missed on both top and bottom line.
*Values retrieved from S&P Global
The miss was driven primarily by weakness in the Food & Health Sciences segment, which declined 10% YoY and offset strong performance in Water Treatment (+21%) and Industrial Solutions (+10%).
Ask Fintool AI AgentWhat Happened to Each Segment?
The segment story tells everything about this quarter:
Water Treatment: +21% YoY to $120.5M
The star performer, now representing 49% of total revenue. Growth was driven by:
- $19M from acquisitions — including WaterSurplus, the largest deal in company history
- Improved pricing on legacy business products
- Gross profit +14% to $29.6M (25% margin vs 26% prior year)
Why WaterSurplus? The acquisition, closed in April 2025, adds water filtration equipment to Hawkins' chemical treatment offering — creating a full solution for customers who need both chemistry and equipment to meet water standards (e.g., removal of iron, manganese, radium, PFAS). The filtration market has historically grown at low double-digits annually, and WaterSurplus' technology delivers lower energy costs, less space requirements, and longer filter life versus alternatives.
Food & Health Sciences: -10% YoY to $70.0M
The laggard dragging down results:
- Volume declines across food, health & nutrition, and agricultural products
- Gross profit declined 15% to $13.8M
- Margin compression to 20% (from 21%)
- Management cited "pricing pressures within food end markets"
Industrial Solutions: +10% YoY to $53.6M
Solid bounce-back quarter:
- Growth driven by manufactured, blended, and repackaged products
- Gross profit +18% to $7.4M
- Margin expansion to 14% (from 13%)
How Did the Stock React?
Muted reaction: -0.7% on earnings day. HWKN traded down from $154.87 at the open to close at $153.75. The modest decline suggests the market was already pricing in some weakness, or that investors are looking through near-term acquisition noise to the longer-term growth story.
The stock is trading 17% below its 52-week high of $186.15, reflecting concerns about the integration costs and Food segment weakness.
What Did Management Say?
CEO Patrick Hawkins emphasized the "proforma" story over reported results:
"From a bottom-line perspective, proforma EPS grew 10% in the quarter over the prior year and Adjusted EBITDA continued to grow. Once again, our performance generated significant cash that we used to pay down debt, fund investments in the business, and close acquisitions."
On the WaterSurplus acquisition drag:
"We are experiencing a continued impact on operating income and earnings per share from the first-quarter acquisition of WaterSurplus, due to $4 to $5 million per quarter of expense related to the acquisition associated with amortization, earn-out accretion and interest expense with one quarter of this impact remaining before we lap it."
On Food & Health Sciences weakness:
"Looking to the fourth quarter, we will continue to see pricing pressures within food end markets and are focused on returning our Food and Health Sciences segment to growth."
Ask Fintool AI AgentWhat Changed From Last Quarter?
Reporting Segments Realigned
As of Q1 FY2026, Hawkins realigned its reporting segments. The former "Industrial" segment was split, with Food, Agriculture, and Pharmaceutical businesses now included in "Food & Health Sciences." This makes comparisons to pre-FY2026 quarters require recast data.
Acquisition Pace Accelerated
Six acquisitions closed in the first nine months of FY2026:
- WaterSurplus (Q1 FY26) — largest acquisition in company history
- Redbird Chemical (December 2025) — eastern Texas distributor
- Four other undisclosed deals
Balance Sheet Deleveraging
Despite debt increasing for acquisitions, management paid down $15M this quarter and brought leverage below 1.5x trailing EBITDA.
What's the Outlook?
Q4 FY2026
- Continued pricing pressures in food end markets
- One more quarter of WaterSurplus integration drag ($4-5M)
- Effective tax rate expected at 26-27%
FY2027 and Beyond
- WaterSurplus expected to be accretive starting FY2027
- Targeting return to "historical organic revenue growth rates"
- WaterSurplus targeting 15%+ revenue growth and 20%+ adjusted EBITDA margins
- Continued acquisition strategy focused on Water Treatment
Consensus Estimates for Q4 FY2026
*Values retrieved from S&P Global
Key Metrics Summary
Year-to-Date Performance (9 Months)
Historical Track Record
Hawkins' 5-year growth trajectory puts the current quarter in context:
The company has executed 23 acquisitions over the last 14 years, with 17 in the last 5 years alone — mostly in Water Treatment. This roll-up strategy has driven the outperformance of profit metrics versus revenue growth.
Bottom Line
Hawkins' Q3 FY2026 was a tale of two stories: record operating metrics masked by acquisition noise and segment divergence. The Water Treatment business continues to execute on its roll-up strategy with WaterSurplus integration on track, but Food & Health Sciences weakness is a concern that management needs to address.
Bulls will focus on:
- Proforma EPS growth of +10%
- Water Treatment momentum (+21% growth)
- WaterSurplus turning accretive in FY2027
- Deleveraging progress (1.47x, down from peak)
- Strong cash generation ($35M operating cash flow)
Bears will focus on:
- Back-to-back consensus misses
- Food & Health Sciences declining 10% with no clear turnaround
- Gross margin compression (20.8% vs 21.4%)
- Elevated interest expense pressuring EPS
Ask Fintool AI AgentView more details: HWKN Company Profile | Q3 FY2026 8-K Filing